4. Real options Though complicated, real options help managers make more informed decisions in selecting projects that add value to a firm. Which type of real option allows a firm to shut down a project if its cash flows are lower than expected? Investment timing option Abandonment option O Growth option Consider the following situation: Robben, an options analyst, recently conducted a workshop for MBA students on valuing options. He made the following statement: "In general, investment timing options make it less likely for a project to be immediately accepted today." Is Robben's statement true? No O Yes expected NPV of a project, and it makes sense to wait and make a more This is because, often, if a firm can delay a decision, it can calculated decision about accepting or rejecting the project